Insurance helps in covering a person so that the risk of uncertainty is reduced to a small extent. Insurances are helpful in so many ways, especially those that continue giving you a small income after you are no longer able to work due to some reason. Disability insurance works in much the same way. Disabilities can happen to any of us at any point of time and an insurance of the same ensures that a regular income is given to us, after we are no longer able to work. This is very helpful especially in joint families, where there is usually only one earning member.
There are three ways in which you can insure yourself against disability. For a start, you should get the insurance cover from your employer, and this has been made a must in quite a few places. This is given sometimes through short or long term paid leaves. Polices usually include more than 50% of the income at present, for a period of five to seven years.
There is a social security policy which will cover you against disability but it is when you have had the disability for more than twelve months at a stretch that you can apply for the same. It is the third option that is commonly preferred by most people. Here an individual disability insurance policy can be bought but this also means that you would have to take a private insurance for yourself. Since there are so many policies available in the market, it is important to really understand the basics and coverage offered by these policies. There is a clause in the employee handbooks of most organizations which states that employees will be covered and medical expenses paid if an injury occurs when the employee is at work, or on office premises.
The most important advantage of having disability insurance is that, if you are injured and cannot work any more in your present job, your income will be taken care of. There are two situations which are possible. The first one is where your disability does not permit you to work anymore at your current job. This usually happens when people are in jobs centered on traveling. You could still talk to your employer about having a desk job. This is a good option as it means that you would be getting the same income inspite of having a disability. In this case, you would be in a position to go back to work after your period of recovery is over. In the second case, you could have a disability which prevents you from having a steady job all your life. This insurance tends to be cheaper than the first but could be less useful.
Disability insurances fall into two brackets. The first is a long term disability insurance which covers a period of more than six months and up to retirement, also offering a bigger cover of 75 – 80% of your annual income. . On the other hand short term disability insurance, would have a smaller cover and could be 60 – 70% of your annual income.
If you do intend on going for disability insurance, it is important to remember that any insurer you go to will look at some basic parameters such as what is your income each month, type of employment, and other personal details. At the same time you have to be clear about what is it that you are looking for in your insurance. Most of the times, it is the kind of work you do will decide what kind of insurance you should go for. Do remember that the amount of money you get during the period of disability would also vary from one insurer to another. Generally, people are insured for more than half their monthly gross income, so that the figure is not too less when compared to a normal monthly salary. If you are a person who has a lot of loans to pay back and a family to take care of, disability insurance would be very beneficial because in the event of any incident, you would not have to borrow money again just to make ends meet. To some extent, disability insurance can help reduce your loan by eliminating the reason to take another one. On the other hand however, in most organizations, employers try to give the best coverage they can for employees as an additional benefit.
There are some important tips to remember about taking a disability insurance. Such an insurance is offered by the government in some countries, mostly by employers and then of course by private insurance companies. It is always advisable to go for a policy that is renewable and which cannot be cancelled. What kind of insurance you take depends entirely on the kind of job you have, if the job consist of working with dangerous tools or machinery such as in a factory or a construction site, a long term insurance would be better. Also the premiums vary from one insurer to another as do the benefits. There are no hard and fast rules as to the coverage you would get also. So when you do go for a cover, try meeting as many insurers as possible so that you would get a better idea as to what benefits you can avail of. Another important decision to take is also for how long you want to take that insurance as a monthly premium would be paid by you for the entire duration of the period. Sometimes, insurers in a bid to get the whole family insured may also offer a package deal which could be cheaper than taking out individual policies.